Nixon in China

There are many worried conversations these days in financial and political circles about China–the demographic, economic, and military behemoth. To feed its red-hot economy, China is gobbling up more and more of the earth’s resources (especially oil, pushing up prices at the pump), causing economic disruptions in scores of countries by exporting plenty of cheap products, and–gasp!–buying up a big chunk of the sovereign debt of the United States. American businesses are alternately worried about competition from China, or fretting that they won’t get a big enough slice of the domestic Chinese market for everything from jetliners to insurance. Some economists point to the vulnerability of having a foreign government owning so much U.S. government debt. What if China sold those holdings? What if it bought even more?

For those of us of a certain age, however, these newfound worries about the most populous country in the world are ironically remarkable. Thirty years ago, Americans thought of China not as an economic powerhouse, but as the home of a billion Red Chinese, rabid Communists who were more doctrinaire than the leadership of “mainland” China’s sometime ally, sometime rival, the Soviet Union. Its leaders did their best to export the Chinese style of Marxism-Leninism to Europe, Africa, and South America. Then Richard Nixon came along, and U.S.-Sino relations were transformed. Nixon’s political and personal petulance and his lawbreaking while President will forever sully his reputation, but when it came to foreign affairs, he was a pathfinder. He had made a name for himself as a hard-line anti-Communist in the 1950s, and was a true believer in the domino theory that served as justification for the Vietnam War. So when he made his triumphant visit to China in 1972 following some preliminary “ping pong” diplomacy, none of his political rivals could argue with him. After all, he had the anti-Communist bona fides.

Not to overstate the case, but that’s why Jim Barnash may be the Nixon of financial planning. After the editors named Mr. Barnash in our May issue as one of the IA 25, our list of the most influential people in and around the profession, we did hear from at least one reader who took us to task. “This insurance sales guy shouldn’t be in the top 2,500,” the reader wrote. It was Barnash, a managing director of Lincoln Financial Advisors in Chicago, who nevertheless stood at a podium at the Roosevelt Hotel in New York on April 28 to announce as Financial Planning Association president that the group had sued the Securities & Exchange Commission. The suit demands that the Federal government draw a bright regulatory line between stockbrokers and planners, between fiduciaries and “advisors” who are representatives of their companies, not of their clients.